Investors...

[DaMummy]

so when can we expect this to somewhat start happening? will this be another thing to happen in Two Months tm?

 

[Anderzon]

Most probably yes. It would also depend on the amount invested I should think.

It is more common to work with one currency in this type of investment due to fluctuation between different currencies. Therefore each investor holds their own risk in accordance to native currency. Besides this holding shares in different currencies would make different outcome when it comes to company value. There are more aspects to it than this too. To avoid making things too complicated I would really recommend using one currency.

 

[WizardStan]

It is more common to work with one currency in this type of investment due to fluctuation between different currencies. Therefore each investor holds their own risk in accordance to native currency. Besides this holding shares in different currencies would make different outcome when it comes to company value. There are more aspects to it than this too. To avoid making things too complicated I would really recommend using one currency.

That means there'd be conversion from USD into GBP and then back to USD when they need to purchase components. That doesn't make sense. With such a limited run, there's really no difficulty maintaining separate accounts, especially since they already have those accounts. Dividends are a percentage payout, so just payout the percentage in your native currency.

 

[Anderzon]

Craigix: Do you really plan to go through with this? Whats your plan, if you do consider it?

 

[wardred]

Well, the currency conversion, both at time of stock purchase, and if somebody sells or transfers their sales, would need to be done. For dividends, too, for that matter. $1 US isn't worth 1 UK Pound, so it wouldn't be fair to anybody, except maybe the guys in the U.S., to say $1USD = 1 share for US stock holders and 1 pound = 1 share for those in the UK. So to get 1000 shares a U.S. investor, alas myself included, would need to put in more than $1k USD.


I could see using a US account to avoid losing some percentage in the currency conversion so we get the closest to a "straight" conversion of USD to BP, without banking fees, etc. (The same goes for selling and dividends.) Though if that were done then it would be OpenPandora as a whole bearing that burden. Seems like a worthwhile thing to resolve.

 

[WizardStan]

so it wouldn't be fair to anybody, except maybe the guys in the U.S., to say $1USD = 1 share for US stock holders and 1 pound = 1 share for those in the UK.

I don't see why not. If you put 1000 USD in the bank, and it pays out 2%, and someone from the UK puts 1000 EUR in a bank that also pays out 2%, aren't you both making relatively the same amount of money?

 

[levi]

Only if you were to do the reverse action when cashing in the shares, if/when it comes to that - 1 UK share -> 1 pound, 1 US share -> 1 dollar. Else you could buy 1000 shares with 1000 dollars, then move to good old blighty and cash them in for 1000 pounds sterling, and you're quids in (at the expense of Craigix). Simpler just to say the shares are listed in a single currency (be that GBP, USD, EUR, JPY, SEK, even CNY) and your investment is converted to that when you invest, then converted back out to whatever currency you require if you decide to cash your investment. At the moment I'd expect that most parts are paid for in dollars (US) so it'd make sense to base the shares on that currency - however if board and case production were to move to the UK (not forgetting the iCP where case production is already in the UK) it'd be better to insure your investment based on the value of the british pound.

 

[wardred]

I don't see why not. If you put 1000 USD in the bank, and it pays out 2%, and someone from the UK puts 1000 EUR in a bank that also pays out 2%, aren't you both making relatively the same amount of money?

Kinda, but not really.


If somebody in the U.K. bought 1000 shares at 1k BP today, and I bought 1000 shares at 1k USD, I've only paid .637 or some close fraction of that for those shares. So I'm automatically making "more" off of my investment than the guy who put in 1k BP. He invested more money in the company than I did because his currency is worth more than mine, but he got the same number of shares. In todays conversion rates I should've only purchased 637 shares or so. So I should own a smaller fraction of the company than the guy purchasing in pounds, and if not I've magically made money at the expense of every BP investor, and to a lesser extent, the Euro investor. A share of the company is a % owned in the company, so those who put in more money should own more of it. Edit: more likely there would be a minimum purchase of SHARES, and I'd have to cough up more USD to get me up to 1000 shares.


If we were talking bonds, you could more easily keep things in the native currencies and simply do things based off of straight interest in native currencies, especially if Craig has local bank accounts in the investor's countries to work with.


A better way to look at it is if I put my USD into a bank in the UK. They'd convert my money to Pounds, then base my earnings in Pounds. If the pound goes up in relation to the dollar, BONUS! If the dollar gains, then bummer. Edit: and even this is still interest, not % of an investment in a company.


It SHOULD work this way, as I understand it, because the worth of the company is based in British Pounds. It's not interest we're talking about after all, but dividends based on a % purchased of a company, and that % has to take into account the difference in purchasing power of everybody's currency. Certainly when OpenPandora looks to purchase stuff, the different values of the various currencies will have an impact on what can be bought.


I hope that makes sense, and is accurate. Anybody feel free to correct me! Edit: And, yeah, I said the same thing two or three times. Sigh.

 

[wardred]

I guess the alternative would be that a US share wouldn't be worth a BP share...but that could get ugly quickly with shares of the company fluctuating as currency prices fluctuate. Easier to say 1 share is definitively worth % of the company, and share price is X in 1 currency. You can purchase in USD, but you have to purchase a minimum of X shares, and those are in BP, so that's where you'd do the conversion. If they're paying out dividends, they'd be based in BP, and you'd convert back to USD on payout.

 

[WizardStan]

Only if you were to do the reverse action when cashing in the shares, if/when it comes to that - 1 UK share -> 1 pound, 1 US share -> 1 dollar. Else you could buy 1000 shares with 1000 dollars, then move to good old blighty and cash them in for 1000 pounds sterling

Problem solved: your US shares can't be sold for pound sterling. You want to cash in your US shares, you take USD regardless of where you decide to move to.


The idea that 1 US share must equal 1 UK share is also not necessary. If he goes with a non-voting stock it doesn't really matter, and preferred stock can be written up exactly like a dividend paying bond where you aren't getting a piece of the company at all, just a fair proportion of the profits.

 

[WizardStan]

I guess the alternative would be that a US share wouldn't be worth a BP share...but that could get ugly quickly with shares of the company fluctuating as currency prices fluctuate.

If other companies can easily trade shares on public stock exchanges around the globe in different currencies, I don't see why OPT would have a problem.


Heck, some companies trade stock on different exchanges in the same currencies, and they have different prices.

 

[neko]

If other companies can easily trade shares on public stock exchanges around the globe in different currencies, I don't see why OPT would have a problem.

Getting listed on a public stock exchange costs a lot of money, time, and paperwork.

Heck, some companies trade stock on different exchanges in the same currencies, and they have different prices.

Not by much. Many Wall Street firms specialize in arbitrage, buying on one exchange and selling on another when there is a price difference.

 

[WizardStan]

Getting listed on a public stock exchange costs a lot of money, time, and paperwork.


Not by much. Many Wall Street firms specialize in arbitrage, buying on one exchange and selling on another when there is a price difference.

Point was that if large companies can manage shares across multiple exchanges in different (and sometimes the same) currencies, it shouldn't be exceptionally difficult for OPT to come up with some contract that is equitable that doesn't require at least 3 (and as many as 5) currency conversions.


edit: for a mere 100 shares, I mean.

 

[wardred]

Doable I suppose, but it makes keeping track of what's actually %25 of the company - or what % of the company any one person has, voting shares or not - trickier. My US stocks would effectively be worth more if the dollar gains on the pound, and less if it falls in relation to it. If the BP took a dive, you could actually run into a situation where the original Craig & CO don't really own even 50% of the company. The outstanding shares wouldn't have changed, but the value of those shares would've. What kind of implications would that have?


You'd have to keep track of that to equitably pay out the dividends. I don't like the "ratio" of my investment changing as several currency's values fluctuate. Trying to keep track of that is more difficult than knowing I have 1000 shares, always X percent of the company, always in one currency, even if I have to convert back to my currency for a payout. A conversion has to happen somewhere.


Openpandora would need to keep track of those currency fluctuations if they ever wanted to offer up shares in the future, to equitably pay out dividends, go public, etc. If there are two or three stock offerings, let's say one more of 10% of the company and another of 5% of the company bringing the original OpenPandora's shares down to 60%, you'd have to keep track of purchase price at several distinct times.


Yeah, I could sell my shares back to the company - assuming the company wants to buy them back, or to another Pandoraite investor at $1000 USD, but it would mean I effectively own a different % of the company than when I put my money in, or that you'd totally ignore currency fluctuations for dividend and similar payouts. Bleah.


Edit: A multi-national has a host of accountants to keep track of these things. I'd like to keep things as simple as possible for all to understand.


Edit2: Sorry to be so argumentative about such a relatively small amount for the investor.

 

[Eduardo]

please look at http://www.profounder.com/


They seem to offer the right infrastructure to fund a company like OpenPandora.


They take care about all the legal aspects, money handling and do have experience with handling


microcredits with a volume of about 150 mio USD.


please see


about the story


Its probably limited to a US based company in the beginning, but you will need


a Us based company and a EU based company anyway.


yours


Eduardo

 

[andyB911]

Point was that if large companies can manage shares across multiple exchanges in different (and sometimes the same) currencies, it shouldn't be exceptionally difficult for OPT to come up with some contract that is equitable that doesn't require at least 3 (and as many as 5) currency conversions.


edit: for a mere 100 shares, I mean.

If in NY you buy non US companies in USD, thats generally via ADRs (American Deposit Receipts). These allow you to buy stocks in dollars and get dividends in $, for stocks in other currencies (given that OP are not going to be listed on 1 exchange, let alone multiple). I don't think we are quite at the stage for the IBs to be issuing these (its done by Investment Banks and as ever there is cost to the effectual hedging of FX risk).


So for now, I'm pretty sure we'll all need to invest in 1 currency and take your risks on the FX side.


Craig - potentially interested. My main concern relates to the unwritten contracts you have with others such as Ed. I think some clarification of how that will be resolved is necessary, but in principle interested.

 

[WizardStan]

Doable I suppose, but it makes keeping track of what's actually %25 of the company - or what % of the company any one person has, voting shares or not - trickier. My US stocks would effectively be worth more if the dollar gains on the pound, and less if it falls in relation to it. If the BP took a dive, you could actually run into a situation where the original Craig & CO don't really own even 50% of the company. The outstanding shares wouldn't have changed, but the value of those shares would've. What kind of implications would that have?

I also argued that a "share" is not actually a share in the company. 25% was just a number Craig threw out, but when offering up investment opportunity, it doesn't have to be purchasing actual pieces of the company itself. OPT would never be in any danger of losing any more of the company even if they did do it that way, because that's not how stock works. There's a finite amount of stock representing a fixed percentage of the company and it never changes regardless of what the price is. Imagine 1 GBP = 1 USD and you and I each buy 1 share at 1000 monies respectively. Suddenly it changes ad 0.75GBP = 1USD: you could sell your UK stock for 1000 GBP, convert 750 to US, and then buy a US share at 1000 USD, assuming there is no clause preventing transferal (and I'd be seriously aghast if there wasn't, but carrying on)


On the open market, however, stock doesn't have a fixed price: it fluctuates depending on what people are willing to pay. If there's a sudden surge of people selling their UK shares to buy US shares, the UK shares will come down in price while the US shares go up in price until they equalize again, probably something like 900 GBP for a UK share and 1200 USD for a US share (probably not that pronounced unless there were a LOT of people trying to make the exchange). If you're concerned that your stock is suddenly worth 100GBP less you shouldn't be: that's what happens when a lot of people sell stock. It's an artifact of the fluctuating currency, but it wasn't caused by it. In our specialized case, they would most likely be sold as non-voting, non-transferable, fixed market price, non-stock investments, which eliminates that kind of fluctuation. You put in 1000 GBP, every 6 months you get a cheque for 3%, you want to sell you activate your sellers rights and OPT buys back the stock at the same 1000 GBP. You put in 1000 USD, every 6 months you get a cheque for 3%, you want to sell you activate your selers rights and OPT buys back the stock at the same 1000 USD. Nobody loses anything that way.

 

[relapse808]

I hope Open Pandora knows what they are doing. I would make sure you are in a good spot before doing this. If you think investors are going to be as nice and patient as preorder people like me waiting over 2 years for my pandora you got another thing coming. If you do this same thing to your "investors" they will surely tear you to shreds.

 

[emcee]

I hope Open Pandora knows what they are doing. I would make sure you are in a good spot before doing this. If you think investors are going to be as nice and patient as preorder people like me waiting over 2 years for my pandora you got another thing coming. If you do this same thing to your "investors" they will surely tear you to shreds.

The only reason anyone would need to preorder a Pandora is that they see a cool gadget and they want it, they don't really have to care about the project itself. Once their preorder is in, OPT owes them a Pandora.


OPT doesn't owe an investor anything beyond their small share of the profits (if there are any). Anyone willing and able to put over a 1000 bucks into this company is likely doing it primarily because they believe in the project and want to see it succeed, and should fully understand the risks. Aside from the incredibly naive, no one will go in with an expectation of a large return on their investment anytime soon, if at all.


OPT is one of the few companies in this market, that's still trying to make something original. Something that doesn't put aesthetics and trendiness above basic usability. That isn't just waiting to see what Apple does so they can copy it. And most importantly, doesn't try to maintain control over a device even after they sold it to me.


I'm willing to invest in this project because I as a consumer I want something like the Pandora to exist now, and into future versions, and as an investor, because I know I'm not the only one. And right now, no one besides OPT is making anything even remotely like the Pandora.

 

[wardred]

I also argued that a "share" is not actually a share in the company. 25% was just a number Craig threw out, but when offering up investment opportunity, it doesn't have to be purchasing actual pieces of the company itself.

Fair enough. I've been a bit too pedantic in this thread, especially without details. I'll wait to hear what Craig says before getting any crazier. Cheers!


Edit:

I'm willing to invest in this project because I as a consumer I want something like the Pandora to exist now, and into future versions, and as an investor, because I know I'm not the only one. And right now, no one besides OPT is making anything even remotely like the Pandora.

Good quote emcee. I'm willing to invest too, and for much the same reasons. Just got wrapped up a bit in how it would work.